A video coding system and method for coding an input frame in which the evolution of discrete cosine transform (DCT) coefficients is modeled as a Laplace-Markov process, the system comprising: a base layer processing system for generating a base layer reconstruction; an enhancement layer processing system for generating an enhancement layer reconstruction; and an entropy constrained scalar quantizer (ECSQ) system for descritizing a prediction residual between the input frame and an estimation theoretic (ET) prediction output; wherein the ECSQ system utilizes an ECSQ that comprises a uniform threshold quantizer with a deadzone size defined by the equation: